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Iran Renews Opposition to OPEC Output Increase

Service : Economy
TEHRAN, June 27 (ICANA) – Senior Iranian oil officials once again renewed the country's strong opposition to a hike in OPEC production ceiling.
Monday, June 27, 2011 7:59:35 PM
Iran Renews Opposition to OPEC Output Increase

"Considering the demand and supply situation in the oil market, Iran will reject any increase in the OPEC output ceiling in the next meeting ... OPEC has no intention to increase prices of crude," said Iranian Caretaker Oil Minister Mohammad Aliabadi, whose country presides over the oil cartel.

The Organization of the Petroleum Exporting Countries (OPEC) meets on September 9 to review its oil supply policy.

The group has already pledged to curb output by 4.2 million barrels per day (bpd), around 5 percent of global supply, since September last year to match the sharpest fall in demand since 1981.

Fundamentals of supply and demand are still weak and most analysts agree the oil market rally to a high for this year of above $73 a barrel at the end of June CLc1 was a result of cross-asset ebullience, which could fizzle out.

Prices have since dropped back below $70, although they have more than doubled from last December's low of $32.40.

Aliabadi had also warned on Wednesday that Tehran would strongly confront any possible move by the oil producing countries to affect market prices, alluding to Saudi Arabia's West-backed surplus production which faced the strong protest of the OPEC members in the last ministerial meeting of the cartel in Vienna.

"Iran will stop any move designed to play with oil prices through production hike," Aliabadi said.

Aliabadi further described maintenance of the current production level by the OPEC members as the bloc's only weapon to control the prices, and reiterated, "We do not allow anyone to play with our national interests."

Saudi Arabia sought hard to convince the member states to demand a boost in production during OPEC's ministerial meeting in the Austrian capital, Vienna on June 8, but it failed.

Following the ministerial meeting, Aliabadi, who presided over the OPEC meeting, told FNA that Iran managed to thwart the efforts made by Saudi Arabia to increase the OPEC oil output during the 150th meeting of the oil exporting bloc.

The Iranian caretaker oil minister said that Saudi Arabia has a history in supporting oil output rise, adding that "apparently, two or three weeks ahead of the OPEC meeting, (US President) Mr. (Barack) Obama" asked oil industry insiders to help lower oil prices.

Aliabadi pointed out that some countries act against their own national interests and seek to sacrifice other states' as well, but the Islamic Republic would defend its interests.

The Iranian official explained that such moves made the latest OPEC meeting difficult for those members who sought a spike in oil production.

"It was very bad and difficult for them (Saudi Arabia), they who wanted to come and not just add 1.5 million barrels but to increase (oil production) by 2.85 million barrels" per day, Aliabadi stated.

The OPEC president further noted that for the first time many countries stood up to Saudi's measure except for the United Arab Emirates and Kuwait that later refrained from entering talks.

He also said that Iran, Venezuela and Algeria and some other countries opposed the Saudi move which was under the Western influence.

"I finally proposed to postpone a motion… by some three months and announce that a final decision will be made in three months as the OPEC has not reached a decision," Aliabadi said, adding that after the interval the bloc could meet and decide based on market reactions.

He added that Saudi Arabia and its allies opposed the ruling and urged a rise in the OPEC output, threatening to unilaterally increase their quota.

It showed they had set their minds on an increase beforehand, regardless of the OPEC meeting's outcome, Aliabadi concluded.

After ministers were unable to reach consensus to raise crude production, OPEC has decided to maintain output levels, with the option of meeting within the next three months to discuss a production hike.

Iran, OPEC's second largest crude exporter, currently holds the presidency of the cartel, a position it is holding for the first time since the 1979 Islamic revolution.

Iran officially took over the presidency of OPEC for the first time in 36 years on January 2011 and the country's former Oil Minister Massoud Mir-Kazzemi was elected as president of the organization.

Aliabadi has recently been appointed as Iran's caretaker oil minister and he represented the Islamic Republic of Iran at the ministerial meeting of the OPEC in Vienna on June 8.

In May President Ahmadinejad relieved the oil minister from his post after the government started merger of a number of ministries, including the oil and energy ministries and Aliabadi, who is a former head of Iran's Physical Education Organization, was appointed as the country's caretaker oil minister in a decree issued by Ahmadinejad.

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